[CASE DIGEST] CHAVEZ v.

ONGPIN (186 SCRA 331)

FACTS

Due to the obsolete real property taxes values, which were still based on the 1978 revision, then
President Corazon Aquino issued EO No. 73 in 1986, which ordered that beginning January 1, 1987,
the1984 assessments shall be the basis of real property tax collection.

Francisco Chavez, in his capacity as a taxpayer and an owner of three parcels of land, challenged the
constitutionality of said EO, arguing that the law resulted in an unreasonable increase in real property
taxes – excessive increase in real property taxes by 100 percent to 400 percent on improvement and up
to 100 percent on land.

This, he said, amounted to confiscation of property repugnant to the constitutional guarantee of due
process.

RULING

The Supreme Court ruled for the Government.

The SC held that EO No. 73 does not impose new taxes nor increase taxes. It added that to continue
collecting real property taxes based on valuations arrived at several years ago, in disregard of the
increases in the value of real properties that have occurred since then, is not in consonance with a
sound tax system, thereby resulting in the deprivation of the local government units of an additional
source of revenue.

 Fiscal adequacy, which is one of the characteristics of a sound tax system, requires that sources of
revenues must be adequate to meet government expenditures and their variations.